Accounting Theory Legal Accounting Context

Question: Describe about the Accounting Theory for Legal Accounting Context. Answer: Introduction With the due passage of time, there has been enhanced the level of transparency, as well as the pressure that has led to the extension of the boundaries and projected the utility of the corporate policies to safeguard the reputation of corporate and have a leading hand on the competitive advantage. Moreover, threat, as well as opportunity has been involved because there are numerous categories of environmental, social and other issues relating to the economy. Therefore, the role of accountancy comes to the forefront because the policies can be developed by them and the issues can be addressed in a positive manner. Further, the business risks can be managed in a proper manner. As a matter of fact, sustainability management is the need of the hour because it projects the response of an organization in terms of sustainability issues. It involves the process of maintenance and long-term involvement of capital that focus on the overall influence of the organization and wealth. Environment al performance is directly associated with the natural capital that is the resources of nature and the method undertaken by the management in delivering the goods, as well as services (Slaper Slaper, 2011). Further, social performance projects the influence of an organization on human, as well as social capital where human capital consists of health, skills, motivation and social capital can be tagged as the value provided by the links of human, associations, and cooperation (Pyo Lee, 2013). Accountancy and sustainable development The profession of accountancy has always connected with the variation in the market and the shift traced in the expectation of the people. Sustainability provides opportunities that are rarely surprising in nature and in the past year's accountancy have become associated in providing valuable feedback, as well as assurance services that are related to the performance of sustainability and reporting (Hegarty et. al, 2014). Beyond question, accountants are at home with the process of sustainability and maintenance of capital. They have mingled with the concept of income, as well as capital, and hence more relevant to sustainability. In 2003, the IAASB circulated the International Framework for Assurance Engagements, as well as ISAE 3000. Such standards provide a number of principles that will have a strong influence on the assurance standard in terms of sustainability reporting. There has been a sharp increment in the accounting academics and that has contributed to the research in sustainability accounting. The increment in the number of accountants over a period of time has led to a strong momentum and has done immense change in the concept of sustainability. This is the sole reason that there has been enhanced the level of transparency along with proper disclosure. Moreover, organizations are taking the concept of sustainability in a serious manner and this is done by the accountants. Therefore, accountancy has ensured that the work is smooth and the method remains undisturbed. This has reduced the business risk to a considerable extent. The process of benchmarking has led to the timely presentation of information. Accountants have a major role when it comes to benchmarking by giving reliable data in a proper manner. The presence of accountant ensures that the compliance is meet in an effective manner and that the data are procured easily. Integrated reporting in Australia Recent corporate scandals all over the world have depicted that management of ESG (Environmental, Social, and Governance) issues of a company can posses a significant influence on its financial performance, thereby ultimately affecting shareholder value. Integrated reporting thus surpasses the traditional period and integrates both financial and non-financial information in order to provide meaningful information to the stakeholders about the organizations performance. The IIRC (International Integrated Reporting Council) has effectively initiated an integrated framework for companies that assist them in communicating the information expected by their stakeholders. In relation to Australia, international advisory firms like Deloitte, PwC, etc have all given due recognition to the concept of integrated reporting after identifying the importance of non-financial information into their key businesses. They have started believing that an integrated organization possesses an integrated policy and vision, integrated policy towards performance and operations, and releasing such reports can disclose both financial and non-financial influences of material risks. Most companies of Australia have concluded to the fact that the concept of integrated reporting is important because it facilitates in a two-way mechanism, that is it addresses the major inefficacies prevalent in the present reporting framework and it also seeks to illustrate how they can manage material financial and non-financial information, and reliance on them (Carol et. al, 2016). Embedding such information offers an indication not only to the staff but also, to the external shareholders t hat these issues prevail at the heart of the companys mission, thereby enhancing their level of confidence in the company. Whilst in Australia, there are guidelines that govern how and when companies must disclose financial information, it is not compulsory for ASX companies to disclose non-financial details publicly. However, taking into account the importance and relevance of integrated reporting, evidence of increasing requirements for disclosure of non-financial information has been observed (Carol et. al, 2016). This is because everyone encountered with an integrated reporting strategy can attain a broader viewpoint of the companys impact as it accommodates parameters and details that surpass normal financial details, thereby revealing valuable opportunities for value increment even from unanticipated aspects. Furthermore, taking into consideration the present marketplace of Australia, there are various groups of stakeholders like customers and investors that are in the procedure of learning about the enhanced value of assessing the performance of companies in a more comprehensive way (KMPG, 2016). Therefore, for these and other groups of people, there exists a scenario for increasing awareness and advocating them about the significance of assessing the performance of companies from other business-influencing viewpoints too. In such a case, integrated reporting can prove to be very relevant as an initiation for further information about their challenges and mission. Furthermore, whilst such enhanced awareness is one major importance of integrated reporting, this must result in enhanced business value too. A loop of management that reports business-influencing information in a wider way can form a basis for improved or developed performance management (Druckman, 2013). In other words, innovation and learning can assist in improving the performance of comp anies, taking into account their reported information together with a model that pursues a potential to reward the management for their contribution to enhanced stakeholder value. This can also influence the long-term health of companies that is a very good advantage. Integrated reporting represents recent developments in a list of reporting initiatives by companies that include CSR, traditional reports, sustainable development report, and health, safety, and environment reports (IR, 2016). Importance of integrated reporting in Australia With the due passage of time, integrated reporting in Australia has emerged in the context of higher investor scrutiny about the value creation procedures of companies together with an innovative appreciation of the risks of governance related to sustainability. It provides a concise and simpler representation of how companies illustrate stewardship, and how it generates and manages value (Samaha Dahaway, 2010). Furthermore, as per the ICAA (Institute of Chartered Accountants in Australia), the concept of integrated reporting also necessitates the engagement of finance teams and CFOs (Chief Financial Officer). These organizational participants were not conventionally present in enlarged voluntary reporting initiatives. In addition, no other reporting framework can accommodate the works of the World Resources Institute, (GRI) Global Reporting Initiative, UN Global Compact, and the World Business Council for Sustainable Development (Jorgensen Soderstorm, 2012). Therefore, informed de cisions about both present and future company performance can only be attained through the concept of integrated reporting. Conclusion The report provides a clear cut indication of the activities that is related to sustainability and the manner in which the development is done. It is done to enhance the awareness of accountants, as well as provide an answer to the sustainability issues. Accountants that are qualified enable a strong movement and helps in providing back up to the members in the field of sustainability. This has led to a significant movement in the small and big firms. Therefore, there has been a massive change in the process of sustainability. Further, the concept of integrated reporting has become famous as it leads to a strong organization with a strong disclosure in terms of financial, as well as non-financial influences in terms of material risks (Eccles Krzus, 2010). Hence, the concept of integrated reporting is bound to receive further heights with the due passage of time. In short, integrated reporting and sustainability is the special attraction that strikes a harmony between the performance and result. Reference Carol, A.A, Brad, P, Prakash J. S, Jodi Y 2016, Exploring the implications of integrated reporting for social investment (disclosures), The British Accounting Review, vol. 48, no. 3, pp. 283296 Druckman, P 2013, Integrate reporting framework aims to promote lasting sustainable change, viewed 24 October 2016, https://www.theguardian.com/sustainable-business/blog/integrated-reporting-framework-sustainable-change Eccles, R.G. 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